The Washington Post article “Beware of Builders Bearing Gifts and Pushing Lending” warns buyers against solely looking at lenders which builders push onto them. While the incentives can seem nice, the buyer needs to make sure that it isn’t coming at a higher cost.
“Taking out the wrong mortgage can be a very expensive mistake over the long term. An expensive mortgage could cost more than the real value of steam jets and granite counter tops. And you wont know if the preferred lender’s offerings are overpriced, whether in terms of interest rates, prepaid interest (known as points) or loan-related fees, unless you’ve already talked to outside lenders.” Read the article here.
The only true and complete way to compare lenders is to get one or several Good Faith Estimates from local lenders. With the Good Faith Estimate, a buyer can go into the model home knowing what their interest rates and payments would be with the outside lender, which provides valuable comparison to the in-house lending companies. With this comparison, a buyer can make sure that the incentives offered by the builder are actually worth using their preferred lender. Even before you look at the model homes, get a Good Faith Estimate.